AER’s Key Points on the EC proposal on Management of Rights

Radio is a constitutive element of the “creative content sector” – radios are both rights holders and important rights users. AER therefore welcomes the displayed objectives set by the proposal for a Directive on collective management of copyright and related rights and multi-territorial licensing of rights in musical works for online uses in the internal market (published by the European Commission on July 11th, 2012). These objectives are to improve management and transparency of entities managing rights, enable dispute resolution mechanisms and licensing solutions for music users.

Radio’s business model is free-to-air / free-online access to radio programmes – AER also welcomes the effective separation of sound from audiovisual rights set in the European Commission proposal. However, the licensing model enabled by this proposal does not address radios’ needs – it falls short of providing the radio sector with a clear approach to the management of right-protected works for sound-only usage. Although radio broadcasters across Europe pay over €2.6 billion per year for content (mostly music rights), they still lack adequate solutions for their online programmes, for both authors’ and related rights. Due to weak licensing solutions and poor conditions to negotiate with entities managing music rights, radios across Europe increasingly find themselves in situations where they cannot pay or play music online. Radio is the most trusted medium as shown in the European Commission Standard Eurobarometer Survey of Autumn 2011 (EB76), and hence needs legal certainty for its programmes, as much as other online services.

In order to enable radios to offer the content listeners are seeking, the proposal of the European Commission should be amended as follows:

Any entity managing any music rights should be subject to the rules proposed by the European Commission aiming at improving collecting societies’ governance and transparency, as well as enabling dispute-resolution mechanisms (Titles I, II and IV) – there should be no exception for entities managing the rights of only one rightholder, for related rights or for small entities. Allowing such exceptions is likely to enable the status quo to continue for radio.

Radio is online as much as offline: any framework should be technologically neutral and ensure blanket licences for all platforms – Commercially funded radios’ business-model is still mainly based on free-to-air FM radio broadcasting. With the development of new technologies, radio must increasingly integrate new platforms and develop new offers to reach its traditional audience: programmes are being broadcast, streamed, webcast and offered on demand. These are new ways of reaching the same audience, so provide no additional revenue. However, for each new technology, collecting societies seek an additional fee, with additional administrative cost even if dealt with by the same entity. Furthermore, collecting societies for related rights do not seem to be in a position to provide radios with legal certainty for their online activities. This adds to the complexity of the rights payments for radios. To ensure clarity and fairness, online and offline fees should be carried out under a single blanket licence fee, in a transparent manner.

Information delivered to rightholders by entities managing rights should also be communicated to rights users, under similar conditions – any rights user should receive the information at least on tariffs (including split costs of both, rights usage and especially administration fees and deductions made for other purpose than administration fees), the licensing conditions, administrative requirements and the destination of the monies received. Radios should be able to choose the appropriate offer from any collecting society, via fair competition on administrative fees.

Licensing solutions only for radios based on the country-of-origin principle should be supported – AER welcomes the European Commission’s acknowledgement of the specificities of radio broadcasters’ services, but the difficulties faced by radios with music rights are not addressed in the current version of the text. For radios, easy-to-handle licensing is seen as a very positive step towards a true EU internal market, via fair competition amongst collecting societies and legal certainty for radios in their online activities. Even in an online environment, commercially funded radios are targeted at local, regional or national audience. They would consequently make use only of one licence valid in all territories where their target audience can pick up the programmes (country-of-origin-principle). This could be facilitated by adding a set of provisions complementing Title III (especially article 33). Such a solution will foster better conditions for both rights holders and users. Compulsory multi-territorial licences do not reflect radio business models and would lead to additional unsustainable costs; besides, the option of commercial agreements should not be precluded.

A strong political signal towards aggregation of music rights should be delivered – for online uses, important parts of the global repertoire are being divided per publishers, and withdrawn from collecting societies’ offer across Europe, due to market movements. With this development, commercially funded radios are bound to address different entities in order to provide their audiences with a full range of music styles. This entails higher costs, more complexity and, eventually, inability to play certain music. For radio, it is essential to ensure that all collecting societies are able to license access to the global repertoire, to ensure easy access for radios and fair competition amongst collecting societies. This signal could be delivered at least in the recitals of the European Commission proposal.

Compulsory collective management of music rights for on-demand programmes with only accessory parts of protected music should be enabled – this would allow radios to set reports or interviews with some background music on-demand / podcasts online. This is indeed an important element for radio’s development on the internet. The music contained in programmes made available on-demand entails obtainment and clearance of exclusive related rights. The multiple rightholders have to be identified, asked for permission, and remunerated. This is a task that cannot practically be undertaken by radios. Collecting societies have the expertise to fulfill this task – they already do so in the offline and online world for linear uses.

Dispute resolution mechanisms should be established as appropriate in every Member State in order to prevent abuse of a dominant position by any entity providing access to music rights – i.e., in Member States where dispute resolution bodies do not exist, they should be set-up. Furthermore, and in any case, these entities should count an equal representation of rights holders and rights users and take fast decisions: one year maximum. These essential elements are lacking in Title IV of the European Commission proposal.

A rights user should be able to purchase whatever rights he requires for whatever purpose wherever he wishes to exercise them from any entity managing rights in the EU against clear, published, comparable tariffs.

Created in 1992, the Association of European Radios (AER) is a trade-association representing the interests of over 4500 private and commercial radio broadcasters across Europe to the EU institutions. It is the only organisation representing only radio to the EU Institutions in Brussels.